Political Rife between two parties is not a new story, and when it comes to our nation, then the fight between the ruling and opposition party is a typical scenario. They try to bring forth weaknesses of each other. Well, the times have changed and so have the kind of allegations. Earlier we heard about cases of fraud where millions and millions of money effortless, and now we have things going digital. Recently, Congress party has alleged 5000 Bitcoin scam in Gujarat.
Last week the Congress party alleged the Gujarat government for the Bitcoin scam. We have seen different ways people try to convert black money to white and this time it is with the help of digital currency.
Congress has accused the BJP government in Gujarat of using Bitcoin to convert black money to white.
We know that Bitcoin has been in the limelight for a number of reasons. It makes the transaction, easy and fast. Moreover, the lack of government control makes the use of this currency for illicit activities, and this case in India is an example of the same.
Another Blackspot on cryptocurrency-
We know that the world is slowly moving towards an era of digital financial revolution. Whereas on the one hand, the researches and tech experts are suggesting that the shift towards digital currency like Bitcoin and Blockchain will lay the foundation of the future development at the same time we have seen cases where people are making use of this currency and platform to do the unlawful act. This incident is not the first time when cryptocurrency has been used for some illegal activities, there have been many cases where Bitcoin was used to to do illicit activities.
What is Bitcoin and what makes it so vulnerable?
Bitcoin is the digital currency or cryptocurrency which makes the rise of the financial revolution. It allows peer-to-peer transactions. All the cryptocurrency transactions are done on the blockchain platform. One of the critical features of this platform is that it will enable the transaction to be free from any control. Moreover, it lacks regulation and excludes third-party interference. Thus, we can say that Bitcoin enabled by Blockchain creates a platform for regulation free transactions. Under such circumstances, it becomes very easy for people to trade anywhere in the world without the government knowing about it. An important point to note about Bitcoin is that the participants remain anonymous. Thus you cannot find out the details of the person. This pseudo anonymity feature of this currency makes it vulnerable and easily prone to illicit activities.
You can use Bitcoin to purchase goods, and some famous online merchants like Overstock.com and Expedia accept Bitcoin payments. You can swap Bitcoin with other currencies, in simple words, exchange of Bitcoin with common currencies is similar to Forex exchanges. Amidst all these benefits, Bitcoin does pose a serious threat, and it aids the purchase of illegal drugs on the dark web marketplace, the very infamous case of Silk Road.
This has given rise to a series of the disadvantage of Bitcoin, here are a few worth consideration
- Scams and Frauds-It’s an unhidden fact that Bitcoin has seen more scams and frauds. The scams have been ranging from Ponzi schemes like Bitcoin Savings and Trust to breaches that led to the downfall of Sheep Marketplace and Mt. Gox.
- Black Market Activity – Bitcoin is a popular currency when it comes to dark web and black market activities. Owing to its ease of usage and control free exchange makes it a popular choice of grey marketplaces like Silk Road. The series of use of Bitcoin for nefarious activities blemishes the Bitcoin reputation.
- Susceptible to High Price Volatility- Bitcoin is very easy to exchange, It ease of liquidity poses a threat as well. It is vulnerable to wild price swings. For example, The Mt. Goz collapse led to the fall in Bitcoin currency by 50%.
There are other disadvantages of Bitcoin like the pseudo anonymity of the users, lack of control and restrictions and most important that it can be traded globally. Another disadvantage of Bitcoin is that mining of the cryptocurrency consumes the amount of energy thus making it a non-environmental friendly currency. All these series of disadvantages has given rise to improvise the use of the currency and to establish regulations which can help in controlling the currency exchange.
As far as the Indian perspective is concerned, the finance minister has declared that Bitcoin and other cryptocurrencies exchange is illegal. But this recent case of 5000 crore scam using Bitcoin has led to a series of accusations regarding the use of this currency for money laundering and use of Bitcoin for converting black money to white. Well, we haven’t heard much about it, but this recent incident has made us ponder over the use and applicability of cryptocurrency, whether it will aid the global trade or will add another feather in the hat of corruption.